Hewlett Packard has added another piece of equipment to its arsenal in its
mission to break into the world of onsite processing services.

The new entry, unveiled at photokina: the Photosmart pm 1000 Microlab printer
that outputs up to 700, 4x6 inkjet prints an hour.

Kalle Marsal, HP's director of marketing, retail photo service business, said
the printer could be incorporated as part of the HP Photosmart Studio setup,
as it has not had the capability of outputting 4x6 prints, or could also be
placed behind the counter, either as an expansion to a busy lab or the sole
printer in a small lab environment. The pm 1000 is similar to the printer currently
being used in the HP Photosmart Express kiosk and requires some manner of input
device, such as a countertop kiosk.

The Microlab printer will carry a list price of $11,990.

Marsal said the first trial models are going into low-volume environments
with about 10-20 units being installed in the U.S. and Europe this month. General
availability is expected after Jan 1.

Separately, it was learned that Dan's Camera City , Allentown , PA , hardly
a small-volume store, will be a test site beginning in November. Mike Woodland,
CEO, said the unit would be connected to his bank of 16 Lucidiom kiosks to
offer ‘instant' print service and will be priced at a slight premium over the
29-cent price for silver halide prints from the lab's Noritsu unit.

The pm 1000 Microlab is fairly compact, according to Marsal, occupying 5 ˝ square
feet of floor space. It employs the HP scalable print technology and uses six
individual ink cartridges, each holding 775 ml. It has a paper capacity of
3,300 cut, 4x6-inch paper.

As to the per-print cost, Marsal would only reveal that it “depends on volume.” Inkjet
print pricing typically falls somewhere between the higher priced dye-sub and
silver halide, the least expensive solution. Will HP inkjet paper ever be competitive
with silver halide? “Over time we have a path to get there,” he said.

The only other inkjet system available for onsite photo production is the
line of dDP models offered by Noritsu, which uses an Epson inkjet engine. While
it's largest model, the dDP-621 will output 460, 4x6s an hour, compared to
the HP's 700 prints, it has more flexibility by offering a variety of print
sizes up to 12x18.

Michael Diehl, HP's vice president, Digital Photography and Entertainment,
Imaging and Printing Group, Europe, Middle East and Africa, made known at photokina
that Jessops, with about 290 stores in the UK and billing itself as the largest
photo retailer there, has signed on as HP's first European partner for the
Photo Studio. He said that the chain would install 3-4 Studio setups in London
and two other cities as yet un-named.

He also stated that HP had signed deals with two other large photo operations
in the UK but would not reveal their names.

HP also made known that it will be combining the services of Pixaco, a major
online operation in Germany that was purchased by HP in December, with the
HP Snapfish brand. The service will be rolled out in the UK , France , and
Austria this month, according to Diehl, and in the rest of Europe by the end
of the year, giving Snapfish a worldwide presence. In addition, he said that
Jessops is already co-branding its own Picture House online service with Snapfish.

Back in the U.S. , Marsal indicated that the HP Studios that have been installed
as a trial by Wal-Mart have been “going quite well, though some locations have
been slower than expected.” So far, he said, a total of 66 Studios have been
placed in Wal-Mart and Sam's Club stores in the U.S. and Canada .

He noted that the greatest success has been in those stores where the employees
are themselves excited about the products of the Studio. In some locations,
he said, posters have been the hot items, while in others albums are number
one. He acknowledged that the stores are being promoted similarly and that
it seems as though the counter clerks are able to communicate their own enthusiasm
for one product or another.

In addition to Wal-Mart, Marsal said that about 100 Studios have been installed
in Longs Drug locations on the West coast and that the stores have been recording “very
high repeat traffic.”